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PUNJAB – New Power of Attorney Rules = Confusion

Something is confusing in the State of the Punjab [As Shakespeare probably did not say]

There is uproar just now in relation to an apparent decision by the Deputy Commissioner of Jalandhar (Priyank Bharati) that Deeds of Power of Attorney cannot be accepted to facilitate the transfer of land in the Punjab area of India. So far as I can ascertain, the background to this decision is a recent Court case in which the Indian Courts merely highlighted that a Deed of Power of Attorney is not in itself a transfer of Land.

The response of the said DC has been to issue an edict that land transfer in India (Punjab) can now only be effected if the land owner is present in India to sign the Deed of Transfer and to confirm and give a receipt for the exact price of it.

It certainly does not appear to me that this is at all a necessary consequence of what the Court has said and the decision seems to be both draconian and wrong.

The concept of a Deed of Power of Attorney as effecting the valid creation of an Agency arrangement has been known to the laws of England and around the World for hundreds of years. The Indian Court has not, so far as I can see, stated that this is no longer a valid legal procedure. Nevertheless the District Commissioner has stated his decision – which is effectively to ban them.

Most of the Powers of Attorney that I deal with are made by people who own land in India, who live in England and who are unable to travel to India. Often this is because they are elderly or unwell, sometimes because their lifestyle or business or childcare commitments make it impossible to travel. This ruling of the Deputy Commissioner effectively means that all of these people can no longer buy or sell or mortgage land in India. Not what the Court ruled at all.

The level of protest against this decree has been such that there is now a hasty compromise in place – Powers of Attorney will be accepted in Punjab provided that the transaction is concluded and registered and stamp duty paid before the end of 2012.

My own prediction for what it is worth (probably rather little, certainly I am as much in the dark as you are) is that this may turn out to be a storm in a teacup, and that the D-C will probably concede that life may go on as before.

In the meantime however, the position of the law of the Punjab is that the old rules apply only until the end of this year 2012 and after that, no Powers of Attorney can be accepted